- Shutdown delays highly-anticipated exchange-traded fund approvals.
- Wide consequences felt in stablecoin, other sectors.
October was supposed to be altcoin exchange-traded funds’ big moment.
However, the US government shutdown threatens to throw a spanner into the Securities and Exchange Commission’s approval process.
“ETF Cryptober might be on hold for a bit,” Nate Geraci, the co-founder of the ETF Institute and President of the ETF Store, said on X. A long shutdown “would definitely impact the launch of new spot crypto ETFs.”
The SEC is sitting on a stack of altcoin ETF applications, including products tied to Solana, XRP and Dogecoin. Yet, with the lights off in Washington and decisions put on hold, it’s unclear when more ETFs will be approved.
The mix of less information and slower regulatory action “usually makes risk markets nervous,” Kate Leaman, chief market analyst at AvaTrade, told DL News.
If crypto is to reach mainstream adoption, “it has to rise above day-to-day politics and be shaped by durable coalitions that can outlast a shutdown,” Adrian Wall, CEO of the non-profit Digital Sovereignty Alliance, told DL News.
Others are brushing off the shutdown as inconsequential.
In the bigger picture, it “doesn’t derail the momentum toward ETFs,” Arthur Firstov, chief business officer at payments infrastructure provider Mercuryo, told DL News.
Exchange-traded instruments “remain important milestones in the adoption of cryptocurrency across institutional finance,” he said.
Wider impact
A freeze in altcoin ETF approvals isn’t the only disruption. Wall Street and crypto investors had been waiting on a tsunami of official data that was supposed to be unleashed this week.
The data influences key US Federal Reserve officials’ “views on whether interest rates should be cut again before year-end,” Ed Yardeni, president of Yardeni Research, wrote in a note to investors.
“With the SEC on skeleton staff, every shutdown slows innovation and keeps investors waiting,” Varun Kabra, chief growth officer of blockchain firm Concordium, told DL News. “Turning innovation into a political football doesn’t help anyone.”
Stablecoins, now just shy of $300 billion in market capitalisation according to DefiLlama data, will also feel the squeeze if dysfunction drags on because the dollar-pegged tokens are linked to US Treasuries.
Brain drain stemming from perceived instability could also be a result of the federal shutdown, according to Przemysław Kral, CEO of the European crypto exchange zondacrypto.
The shutdown “could also subtly persuade the crypto talent pool toward hubs like Singapore or Zurich, where regulatory stability acts like a magnet,” Kral told DL News.
Crypto market movers
- Bitcoin is up 2% over the past 24 hours to trade at $119,168.
- Ethereum is up 2% over the past 24 hours, trading at $4,393.
What we’re reading
- Robinhood CEO: Here’s when the tokenisation ‘freight train’ will shake up the $115tn stock market — DL News
- CoinGecko eyes new ways to value cryptocurrencies amid Hyperliquid token debate — DL News
- The Onchain 5: How Telegram and Binance Turn Going Onchain Into Fun and Games — Unchained
- Year-end targets: BTC, ETH, SOL — Milk Road
- Solana ETF approval now ‘100% certain,’ says analyst— DL News
Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email atlance@dlnews.com.
